The Crisis of Leadership and Limits of Control
Control sacrifices long-term stability and power for short-term personal gains
We are witnessing the daily impact of individuals who use control as their primary tool of leadership - and viscerally understand relational power and don’t care about its costs.
Control vs Power
Control is the authority to determine how resources are used, where time and money are spent, and what happens to physical assets like land or buildings.
Control is finite.
Control is a limited, often coercive, and expensive type of power. It is also immediate, tangible, and easy to understand. For those with resources, it provides immediate satisfaction and defers its costs by depressing engagement.
Power is the capacity to achieve results. Control is a limited type of power, but results can also be achieved when people use relational power to come together and collectively pursue solutions or opportunities. This relational power can be seen in fundraising efforts, strikes, voting, community service projects, protests, caring for others, or advocating for ideas.
People generate power when they unite and contribute to a greater shared good. Democracy is a strategic form of collective power that creates collective benefits. Individuals regularly use relational power when interacting with others—by asking questions, joining friends on a service project, showing up for someone, inspiring others, listening, or building trusted relationships. This type of power only requires the willingness to use it.
Relational power is infinite.
CONCENTRATION INVITES CONTROL - AND ABUSE
When a leader, whose primary tool is control, has authority over a vast collection of resources, it creates inordinate risks. Control allows a leader to have an immediate impact by using resources to force their will onto others. With the switch of a button, the lights go on - or off. This dynamic combined with concentration of resources attracts the most abusive individuals; those who have no moral compass and don’t care about anything other than themselves.
Control, however, is limited - no matter how extensive the resources are. Over time, it is no match for relational power unless the leader using it can convince individuals that their power doesn't exist. Alice Water summed it up succinctly: "The most common way people give up their power is by thinking they don't have any."
Controlling leadership defends itself against relational power through confusion, overwhelm, abstraction, and a lack of transparency. It keeps people so busy, confused, and isolated that they can't connect the dots or feel confident in what they see and know.
THE APPEAL OF SYSTEMIC CONTROL
This controlling leadership approach has become normalized in the private and public sectors because it’s short-term and immediate gains were impressive when applied to large organizations. Control and it’s binary dynamic is also easy to understand; it is not nuanced and therefore it is easy to weave a compelling understandable story.
It is now embedded in organizations' operations and and has become systemic. The transition has often been framed as the pursuit of efficiency; it is anything but.
Along with commercial organization it has also been applied to the federal government. Heather Cox Richardson often notes that the U.S. federal workforce has not grown for decades, even as the U.S. population has increased.
This aggressive reduction started in the 1980s under the guise of efficiency and using the operational approach heralded by Jack Welsh, who championed outsourcing.
However, the government still needed to operate. Technically, the federal workforce was reduced, but the use of outsourcing to private companies increased dramatically. The impact of this can be seen in the revenue growth of companies like Booz Allen. Worse still, for many government contractors, like the military firm Blackwater, there is little transparency into how much federal work they are doing or how much they make in profit.
In outsourcing of so much work makes it extremely hard to understand the entirety of the organizational system. That complexity makes it hard to track, criticize, or regulate. It is hard to hold these organizations and their leaders accountable in spite of the public funds they receive. This is a strategy reduces the risk of power being used to hold them accountable. That, more than efficiency, is the benefit of an operational outsourcing strategy - it protects the executives who control the organization’s resources.
THE COSTS OF SYSTEMIC CONTROL
This is the ‘Jack Welch School of Business’ that extolled outsourcing everything in an organization except for core differentiators. It was adopted hook, line, and sinker by American industry. It maximized flexibility and control while ignoring the increased costs and long-term risks. It ignored the costs, which included partner profit margins and human costs - layoffs, hellish agency/consulting work life, and lack of employment stability.
And that approach worked… as long as nothing changed.
When markets change, technology accelerates, or customers need innovative solutions, the operational systems of an organization need to adapt as quickly as its markets. Accounting, marketing, and IT all must change to support new innovations.
Yet for large organizations, it is more common to see EY handling accounting, Edelman operating marketing, Accenture handling IT, and strategy given to McKinsey—all companies with a greater incentive to grow their own revenues and profits than ensure client efficiency.
When organizations need to innovate, how many employees do they have left with the insight or experience into products, strategy, operational knowledge, and customer understanding to change effectively? And the employees who are left certainly don't have an understanding of what is being done by all the operational partners.
Because employees' value is not listed as an asset on corporate balance sheets, they are only seen as costs. Organization are motivated to minimize these costs and move them off of their balance sheets, further encouraging outsourcing and layoffs. As a result, employees with the insight and experience to innovate and who would be effective in helping the organization change leave; their compensation simply does not keep pace with their value.
Together, the costs of outsourcing are immense:
Conflicting incentives between an organization, its partners, employees, and customers.
Operational friction and cost caused by constant contract negotiations.
Investment in systems to control complex processes.
Integration costs required to get insight across an organizational ecosystem.
Poor cross-functional alignment, coordination, collaboration, and insight.
Decision lags and bottlenecks.
Distributed accountability and easy-to-deflect responsibility.
Low employee trust, loyalty, and engagement.
The result for organizations is, ironically, enormous inefficiency combined with an inability to change, causing existential risk.
Executives sacrificed the long-term stability and power of organizations for short-term personal gains and control. It is a modern-day and more complicated version of a Ponzi scheme. The executives who disemboweled organizations ran away with most of the benefits and left most of the costs.
Is is, unfortunately, what is now happening to our democracy.